International Monetary Regimes in History. Essay

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Bureev Maxim IFF 1-4 15 May 2013 International monetary regimes in history. Nowadays it’s impossible to imagine modern economy without international monetary system (IMS). Under international monetary system we understand some rules and procedures for exchanging national currencies. It consists of interconnected rules and procedures and is subject to the foreign exchange market, and therefore to the judgments of currency trades about a currency. Throughout history, people were trying to find various ways to hold some international operations like trading, transactions or investing. So precious metals such as gold and silver were used for these processes. We can say that IMS begins to exist from the moment when economy as bilateral relations are transformed into the structure, not just internationally, but also dependent on more or less of multilateral agreements and institutions. Therefore, in all early states and empires, there was a certain primitive form of IMS. When fist coins and banknotes appeared, countries were producing their own currencies and many of them wish their currency to become an international one. But by that time only US dollar was more or less close to this position. Anyway the development of monetary systems of each country required the development of international monetary system as a whole, and this problem required complicated solution. In order to find the most efficient way of leading international monetary policy people were inventing different international monetary regimes. This was a long way which was full of mistakes and collapses of IMS. Economists believed that floating exchange rates can cause only instability and other serious problems, especially in emerging economies. So their choice was fixed exchange rate. It is a type of exchange rate regime where in a currency's value is fixed against the value of another

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